Insights

The Glass Tax Ceiling for working women still not resolved?!

Although the current plan is suspiciously not detailed, it appears the “Marriage Penalty” is not going away. Even worse, many married taxpayers will be paying MORE tax under the current proposals.

To review the marriage penalty exists when two single wage earners get married and pay more tax on the same now combined income. The good news is this penalty doesn’t start until the combined wages exceed $420,000 combined wages. That is up from $160,000 under the current plan. Maybe Hillary would have been fair with tax reform but the democrats had 8 years to change this injustice and did nothing. It was only improved under the Regan and Bush administrations and now potentially the Trump administration as well.

The chart below can be used to see the new tax amounts due for your income level to see the actual dolor change in tax the proposed reform will produce. This chart is for comparison purposes only. At the time of this writing the exact income levels that the new 15%, 25% and 35% rates have not been released. The pre tax reform levels were used.

For example, if you earn $50,000 as a single taxpayer you would save $1,026 in tax. A married couple earning $50,000 combined wages will save $568. This is the federal government’s idea of making your taxes simple.